2018 (10) TMI 1069 - AT - Service Tax

Refund of accumulated CENVAT Credit - export of services - Relevant time - Rejection of refund on the ground of time limitation - Rule 5 of CENVAT Credit Rules, 2004 read with Notification No. 27/2012-CE(NT) dated 18.6.2012 - Held that - The issue is no more res integra and considered by the Larger Bench of this Tribunal in the case of Span Infotech Pvt. Ltd. 2018 (2) TMI 946 - CESTAT BANGALORE , where it was held that In respect of export of services, the relevant date for purposes of deciding the time limit for consideration of refund claims under Rule 5 of the CCR may be taken as the end of the quarter in which the FIRC is received, in cases where the refund claims are filed on a quarterly basis. Matter remanded to the adjudicating authority to compute the time limit - appeal allowed by way of remand.

Summary

Issues Involved:
Computation of time limit for allowing the refund claim on export of services under Rule 5 of CENVAT Credit Rules, 2004.

Analysis:
The case involved two appeals filed against an order passed by the Commissioner of Service Tax rejecting a refund claim on the grounds of limitation. The issue at hand was the computation of the time limit for allowing the refund claim on export of services. The appellant argued that the limitation should commence from the date of receipt of foreign remittance for the quarter, while the revenue supported the findings of the Commissioner. The Tribunal referred to a previous decision by a Larger Bench regarding the interpretation of relevant dates under Section 11B in the context of export of services.

The Tribunal observed that Rule 5 of the CENVAT Credit Rules, 2004 allows for the refund of unutilized CENVAT credit, subject to specified conditions and limitations. The notifications specify that refund claims must be filed within the period specified in Section 11B. However, the relevant date under Section 11B does not explicitly cover export of services, leading to a need for constructive interpretation to achieve the objective of granting refunds. The Tribunal considered the date of receipt of foreign exchange as a significant factor in determining the relevant date for export of services.

The Tribunal also referenced a decision by the Hon'ble Andhra Pradesh High Court, which held that the date of receipt of consideration could be considered the relevant date in certain cases. Additionally, the Tribunal mentioned a previous case where it was observed that the end of the quarter in which the Foreign Inward Remittance Certificate (FIRC) is received could be considered the relevant date for filing refund claims. The Tribunal highlighted the need to balance the retrospective application of beneficial amendments with the prospective application of provisions imposing burdens or liabilities on the public.

Based on the precedent and legal principles discussed, the Tribunal remanded the appeal to the adjudicating authority to compute the time limit for the refund claim in accordance with the principles laid down. The appeals were allowed by way of remand, emphasizing the importance of considering the end of the quarter in which the FIRC is received as the relevant date for filing refund claims on a quarterly basis.